Overdrafting has been around for some time — over 50 years now. What started as a simple act of kindness from bank owners turned into a highly profitable cash cow for banks. While it hasn’t always been this way, overdraft fees may be a hassle for consumers who make an honest mistake. In this article, you’ll discover a bit about how this practise started and how it reached the status it’s at today.
How it began
Back in the 1960s, banks like the Suburban Bancorp of Palatine, III. allowed customers to overdraft, covering the charges as a courtesy to its clients. [1] As more banks caught onto the idea of doing these courtesy loans, the 90s brought about a change in the system by Sam Davis, a banker who had recently joined Strunk & Associates. [1]
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